Topic 4: Six Steps to Avoid Policy Purchase Regrets

As life Insurance serves as a safety net to mitigate future unfavorable circumstances, it is imperative to know the intricate details of what the plan entails.

As life Insurance serves as a safety net to mitigate future unfavorable circumstances, it is imperative to know the intricate details of what the plan entails. One of the main reasons for individuals to be disappointed with their life insurance plans is when they do not fully understand the details of their coverage, thereby derailing the claims process, be in at the time of maturity or untimely death. Here are six simple ways to avoid this pitfall at the policy buying stage itself.

Have clarity on buying the policy
Before even starting the buying journey, have clarity on the life goal you plan to secure through the life insurance policy. While money is fungible, it is always good to buy a life insurance plan for a specific need. This not only gives the reason to buy, it also helps you continue with the policy for the full policy tenure. You can also assess how each of the product features is linked to the need for which you are buying, thus reducing the risk of buying something that you later regret. Though once-in-a-lifetime offers are enticing, it’s a trap you should avoid at all costs. Always ask for the company authorized ‘benefit illustration’ customized for you and don’t blindly fall for high returns simply because stock markets might have performed rather well in the last two years.

Do your own research
You must do your homework carefully and go through the product brochure and the other available information on the company’s website to understand various aspects of the policy you plan to buy. While sellers are a good source of knowledge, your own research goes a long way in making an informed decision. If required, talk directly to the company representatives. Even better, ask your agent if you can speak to other customers who have purchased the same/ similar product five years ago. You do this for your property purchase, don’t you?

Don’t take a decision in haste
Any decision taken in haste related to financial investments is likely to be regretted later. You will always find customized products that cater to your specific need. A little financial prudence coupled with patience will help you make an intelligent and informed decision.

Fill in the details correctly
When you get a job offer or buy property, do you sign the papers without reading? Of course not. So why would you sign your insurance papers without reading it? Also, closely look at the medical details asked in the form. Concealing information related to your health can lead to claim rejection later, defeating the very purpose for which you bought the policy.

Check the product name, type
There are multiple policies sold by life insurance companies—term plans, ULIPs, and traditional plans. There are minor product variations under each category. For example, when you procure a home loan, a traditional endowment policy may not serve your purpose. Instead, you may need a policy customized for loans available with your mortgage loan provider. Therefore, always check the name and type of the product while filling out the form.

Wait for a direct call from the insurer
Most life insurance companies call you to verify your understanding of the key terms and conditions of the policy. This is done to ensure that you have understood the policy, its benefits and various terms and conditions. If you feel that the policy sold was different from what the seller explained, you can cancel it. In any case, there is a ‘freelook period’ after you receive the policy document, during which you can chose to return it within 15 days if it does not meet your expectation.

Source: financialexpress.com